Fitch Affirms Alaska Housing Finance Corp.'s Short-Term Rating at 'F1+'

NEW YORK--()--Fitch Ratings affirms the short term 'F1+' rating on the following obligations issued by the Alaska Housing Finance Corporation's (AHFC or the corporation):

--$150 million commercial paper (CP) program ($53.6 million CP notes currently outstanding);

--$50 million general mortgage revenue bonds II;

--$135.9 million governmental purpose bonds;

--$161.8 million home mortgage revenue bonds;

--$50.8 million state capital project bonds;

--$50 million state capital project bonds II.

SECURITY

The internal liquidity support is secured from the self-liquidity funds of AHFC.

KEY RATING DRIVERS

SUFFICIENT LIQUID INTERNAL RESOURCES: Internal funds/cash reserves are above 125% of outstanding short term obligations, even after Fitch's stressed scenarios are placed.

HIGH LONG-TERM RATING: Sound financial ratios, a sizeable asset base, and strong management oversight provide support to AHFC's 'AA+' general obligation rating which is consistent with a short term rating of 'F1+'.

MANAGEMENT EXPERTISE: Management has proper policies in place to ensure for a timely delivery of the cash amounts necessary to purchase variable rate demand obligations or CP if necessary.

RATING SENSITIVITY

DECREASE IN LIQUID ASSET BASE: A decrease in AHFC's liquid asset base could lower their respective coverage levels and put negative pressure on the short-term rating.

CREDIT PROFILE

The 'F1+' rating reflects AHFC's ability to cover short term obligations by a minimum of 1.25 times (x) from internal, highly liquid resources. As of Feb. 3, 2014 the corporation's pool of highly liquid cash and marketable securities totaled a Fitch adjusted $800.2 million. Based on the Fitch adjusted $800.2 million and assuming CP is drawn to its maximum authorized amount, the available resources would cover outstanding variable rate bonds and CP by 1.34x.

AHFC has specific policies in place in the event of a failed remarketing, mitigating concerns over a potential non-delivery of needed funds. In addition to sufficient reserves, the corporation's housing finance bond portfolio is performing well limiting the likelihood of a potential drain on program surpluses or unrestricted assets. Fitch currently has an 'AA+' rating on the corporation's general obligation pledge which reflects the corporation's sound financial ratios, sizeable asset base, and strong management oversight.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Rating U.S. Public Finance Short-Term Debt' (Dec. 9, 2013);

--'Revenue-Supported Rating Criteria' (June 3, 2013).

Applicable Criteria and Related Research:

Rating U.S. Public Finance Short-Term Debt

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724680

Revenue-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709499

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=822795

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Contacts

Fitch Ratings
Primary Analyst
Ryan J. Pami, +1 212-908-0803
Analyst
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Charles Giordano, +1 212-908-0607
Senior Director
or
Committee Chairperson
Maura McGuigan, +1 212-908-0591
Senior Director
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Ryan J. Pami, +1 212-908-0803
Analyst
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Charles Giordano, +1 212-908-0607
Senior Director
or
Committee Chairperson
Maura McGuigan, +1 212-908-0591
Senior Director
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com